Parties face calls to buy out public private contracts for schools and hospitals

Parties face calls to buy out public private contracts for schools and hospitals

A TRADE union has called on the parties to commit to buying out contracts for privately-financed schools and hospitals.

Unison, which represents public sector workers, said the Scottish Government could save around £12billion by buying out contracts for a range of projects currently being paid off, like a mortgage, over 25 or 30 years.

None of the parties has backed the call but the SNP and Labour have committed to reviewing some or all of the schemes.

The call follows the Edinburgh schools fiasco, which saw 17 privately-financed buildings closed due to safety fears and raised fresh questions about the schemes.

Unison said the "inefficiency" of the contracts was as great a concern as building quality and safety.

Taxpayers face repayments amounting to around £35billion for schools, hospitals, roads, prisons, waste disposal facilities and other projects built under PFI, PPP and two new variants developed by the SNP government, NPD and the Hub initiative.

The bulk of that, around £31billion, relates to the earlier PFI and PPP contracts, though the £4billion owed as a result of newer schemes is set to grow as the Scottish Futures Trust, the government body which negotiates public-private deals, delivers more projects.

In its own election manifesto, published yesterday, Unison said: "The recent scandal round PFI Schools in Edinburgh shows one weakness of the PFI model of funding and building infrastructure.

"We believe that PFI whether labelled as PPP or NPD or Hubco is an inefficient method of delivering infrastructure projects .

"The inquiry into the failings in Edinburgh should be widened to include all projects built using this method including considering how to make the costs more transparent."

It cites the example of a hospital in Northumberland, where a PFI contract was bought out by the local council last year, as evidence the Scottish Government could save billions of pounds.

Mark Ferguson, of Unison Scotland, said: "Local Government has been starved of cash and the price for that has been paid by staff and service users alike.

"We need the Scottish Government using all of its powers to get more money into local government.

"As part of that we should be looking at all of the PFI/PPP deals that have been signed by councils and the Scottish Government should be looking at how we can buy these back. "That will save money and increase accountability."

The Scottish Government is set to gain new borrowing powers, though insufficient to buy out all the country's public-private schemes.

However, Unison argued councils and new joint health and care boards could also raise the cash by borrowing at cheaper public sector rates.

Unison's manifesto also warned councils had "borne the brunt of austerity and this must stop".

It said councils had shed 40,000 jobs and faced a further £500million of cuts, a situation it described as "simply unsustainable".

The SNP manifesto says the Scottish Futures Trust will "continue to review existing PFI/PPP contracts" with a view to cutting costs, "including ending contracts where possible and appropriate".

Labour has promised a review of all public-private contracts, including those under the SNP's NPD or Hub models.

Scotland's biggest public-private investment to date was the school building programme undertaken by previous Labour-LibDem Holyrood administrations.

Repayments from it will total around £15billion. New hospitals will cost a further £8billion.

Among the projects being financed by the more recent NPD system is the new Aberdeen bypass, which has an initial capital costs of £470million but which will cost taxpayers £1.45billion over 30 years.

SNP candidate in Edinburgh South Jim Eadie said: "It cannot be right that the public sector continues to pay exorbitant prices for school contracts in Edinburgh where the buildings are clearly not up to scratch.

"We will enhance local democracy by de-centralising powers to communities, enabling community organisations to run services where appropriate and to make decisions over at least one per cent of all local authority spending."

A Labour spokesman said: "This major intervention from one of Scotland’s biggest trade unions underlines that Labour’s three priorities for the next Scottish Parliament are the right ones for Scotland.

"Labour will use the new powers to tax the richest one per cent so we can invest in schools and stop the cuts to public services.

"Labour is committed to a review of all PPP, PFI and NPD contracts to get best value for the taxpayer.”

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